So, since both gold and silver broke their multi-year support, and have a lot of possible downside in the chart before they hit next support, I think for the time being I can consider that whole scene broken and not worth investing in.

Hey, I've still got some nice shiny coins, and I know they'll always be worth something; but it really seems, on first pass, like the commodity play is over for now.

You know me. If it's not a commodity & EM bull market, it's a US bull market. Simple Jim Rogers theory. China worries people and India's been slowing down, and Brazil has already hit that middle-income wall so it seems. Meanwhile, many commodities (including gold but only to a small extent) have seen supply built out in the past few years, beyond what was needed for the EM growth we ended up with after 2010.

Maybe this will only be a short-term counter-trend for a year or two?

Maybe Japan implodes; though the BoJ is now buying twice as many bonds as the government is going to issue, for the next few years; so I don't see a Japan yield explosion coming.

I don't see China collapsing; they have enough reserves to buy the Nikkei 225 with money left over, so they should have little problem even if the debt system over there does ever come apart. Chinese leadership is very inspired to remain in power.

SPY is up something like what, 12% this year? I was saying a while back that things felt very 1995.

But in 1995 the S&P 500 went up over 50%. Really, in one year. Look up the chart. Again, after a very deep recession.

Maybe I'll just stuff my money into an equal-weight S&P ETF and walk away til the PMS & miners stop being broken. It seems like that was what I was supposed to have done two years ago, right?

But I'll take a few weeks off to decompress and not read any goldbug commentary, first. They've been wrong and I'm through listening to wrong commentary.

In the meantime, I'm going to turn this into a music video and kitties blog!

Krugman - rubbin' it in the goldbuggers' faces. Well, you have to admit the neo-Nazi goldbug fringe has had it in for Krugman and his Keynesianism for a while now. Revenge is a dish best served cold, and it's very cold in the gold world.

“Many of the big deposits have now been found with current technology he says. To grow we are going to need new methods and, we are going to have to go deeper, all of which is going to take a lot of capital.”

"Gold prices tend to go northward when there is a stimulus. With the US economy getting better by the day, money will soon flow out of investments in to gold,'' said Sushil Sinha, at Karvy Comtrade. Given the apprehensions of the US Federal Reserve scaling back the quantitative stimulus, analysts are of the opinion that international gold prices are bound to fall below the $1,500 an ounce level in the next couple of weeks - just in time for the Indian jewellery buyer to march in!

As I go to hit "SEND" I see that "they" have finally succeeded in dropping price through $1525. Funny how this has happened immediately following the London PM fix. So, there you go. Look for a "V" bottom very soon and a sharp rebound by later today or Monday. This is it! This is what we've been waiting for...A final, capitulative, sell-stop running Washout.

Let's see how well that prediction works out for him, eh?

UPDATE: in the comments he digs it even deeper:

Look, I don't mean to be cold and heartless about this. This sucks. I understand.But we have been mentally preparing for this for weeks. How many times have I mentioned that a final drop through 1525 was a possibility? And that, IF IT HAPPENED, it would be The Final Washout.This is it. I am supremely confident that price will soon reverse (the next 3-5 days). Just like a blowoff buying TOP, this is a washout SELLING bottom. No different.

Well, this is probably a Sword of Damocles day for gold and silver. Who's going to want to go into the weekend holding gold and silver, or even the miners, with gold just over $1540 and silver just over $27, the day after a new high in the S&P and a new advance in 52-week highs?

So I'm calling for another, more severe, lower low in PMs and miners. Yup. Now if I'm the world's greatest contrary indicator and the last fool, I've just turned the market for you, and I'm sure you'll thank me.

Meanwhile, here's some fragrant news I scooped up last night for your viewing pleasure:

Bespoke - bulls move to the endangered list. With the S&P at a new high, AAII is below 20%; as they say, "Sometimes you see an update to an indicator and the only thing you can do is scratch your head."

Beyond Brics - Does Indonesia overheat or continue growing? It'll be an interesting coming few years for the emerging markets, I think; they all seem to be hitting roadblocks. Which suggests an end to the commodity/EM bull and a beginning of a new US equity bull.Mineweb - Rio, Vale, and the iron ore glut. Good point; if they can mine iron at $40 but sell it over $100, then they're making fantastic profit. So why not overbuild capacity?

Since IKN used up its strategic reserve of swear-words during his recent Anglo-Saxon interrogation of Laughin' Star, and since the author of that blog is a bit of an arty-farty round-glasses intellectual type, I thought it'd be a good idea to pass on the Shakespearean insult kit:

So from now on he can refer to James West as "Thou mewling sheep-biting flirt-gill" and your average junior mining exec as "thou mammering fool-born canker-blossom".

I've been reading the whinging on tfmetalsreport; he actually has a point today, when he notes that while GLD holdings have dropped significantly, there's been no similar drop in SLV holdings.

Almost as if people are selling gold and not silver.

Anyway, someone in the comment section posted this picture:

I just wanted to post it because

1. It's hilarious,
2. You can see where all the North Korean food is going, and
3. Do they get a medal every time they plant cabbage or ship out a hundred kilos of heroin? Cos they haven't actually been fighting a war at all in the past 50 years, y'know.

As my dad said, you're always guaranteed to win a war against a nation whose commanders wear a bunch of medals.

By the way, if you like causing shit, feel free to email marketcall at bnn dot ca and ask them to inquire of Sprottling Jason Mayer why his overlord has sold about $30 million in PHS in just the past few weeks unless it's because he thinks silver is doomed.

Yes! He's selling millions of dollars worth of PHS every day! The metal that he says is going to the moon!

Does nobody in the media even bother to ask any of the little Sprottling analysts that they constantly interview why, if they're supposedly bullish on silver, their commander still wants to sell millions of dollars worth of silver each day? Hm?

He's abandoned you! Eric Sprott has abandoned silver! He's given up! Why are you still in if Sprott has given up? Who are you going to take your commands from now? Who's left to soothe your fears?

If you're like me, you've recently spent most of your capital "gains" (ha!) calculation time muttering things to yourself along the lines of "what the fuuuck was I smoking when I bought that sack of crap?"

Well, now you can feel better about your investment decisions in more ways than one: invest in Medical Marijuana, Inc.!

Yeah, it's a pink, but at least it's not a junior miner.

Even better, here's the weekly:

A stair-step uptrend that doesn't seem to end? It looks all so foreign to me!

Disclaimer: you're reading a free blog by some guy who still buys shitty junior miner stocks. No reasonable sentient life-form would possibly consider this "investment advice".

That way the success or failure of the plan is predictable and evaluatable. Difficulties and roadblocks can be identified early and overcome. In fact even attempting to follow the SMART model helps you to cut out the frills by identifying what's peripheral and unimportant, identifying deficiencies is your planning, and identifying specific paths to success.

In this case you should lay out a critical path for all activities, budget and timeline for each, and the way you'll evaluate the success of each. (See how cost-benefit analysis automatically works its way into the system here?) "Explore", "revitalize", and "lay the groundwork" are not words you use in a strategic plan.

I know this cos I have to write these for work each year.

Oh and BTW, if you need help with this, you can hire me as a management consultant for $20K per conference call. Seriously, I'd be happy to help you. I have absolutely no professional qualification in that field, but at least I work for a large listed engineering company where this has become part of the corporate culture.

Price negotiable I guess. You can get in contact with me via certain Peruvian or white-bearded mining analysts.

UPDATE: No, I won't accept payment in shares.UPDATE TWO: And all explorecos pay in advance. Sorry, but the industry has developed a sordid reputation, and I'm not invoicing anyone who might not even have a listing six months from now.

He makes a good point about Roubini's little goldbug-baiting twitterpation of earlier this week: if Roubini thinks gold is going to $1500, when did he enter that trade? It's pretty low-hanging fruit to talk about $1500 gold now instead of a few months ago.

As if Roubini was one of those brats in highschool who made fun of people's hair and called them gay. Not the indication of any higher level of wit, that's for sure.

Then he doesn't understand why people view gold in foreign currencies. Because I guess he's a paper trader and doesn't care about supply and demand.

Then he misses the point of Soros' comment on gold. Soros is just saying what Santelli said: paper gold is not a safe-haven asset. It entails a ton of counterparty risk (MF Global cough cough), as well as other risks. Physical gold is a safe-haven, and you can bet Soros who fled Hungary in 1947 owns physical gold. Good old privately-held, allocated gold.

And the silly bullshit of the past two years doesn't count as the type of thing you buy physical gold to protect yourself from. You use gold to protect yourself from the possibility that all your other assets go completely to zero.

FT Alphaville - robots, China and demographics. I guess automation of the Chinese manufacturing economy would improve total factor productivity, no? Is this how they'll overcome the coming demographic peak?

FT beyond brics - pie-in-the-sky Indian car sales forecasts. It all comes down to whether the Indian economy has bottomed out or not. We'll have to keep an eye on that, btw, because of the whole gold thing.

Mineweb - Cowen Securities says North American mining costs have peaked. Well, when you destroy the entire exploration and development industry, shouldn't you expect a lot of your input costs to go down? One problem I have with this, by the way, is assuming they can find new properties to put into production, we might enter a long 1980-2000 type period where companies can increase total world production without killing their own margins - thus gold goes down. Thankfully, for the time being, I haven't heard anything about the end of EM inflation.

Wednesday, April 10, 2013

You are not supposed to put money into a double-leveraged ETF and just walk away. You lose money on the nightly re-leveraging.

Unless, of course, your double-leveraged ETF is short the gold miners; in that case, you can just put however much you want into this ETF at the start of last November and have almost two-bagger today.

India Reuters - crash in Indian car manufacturing. Sorry, that doesn't look positive for gold. Then again, it's not like cars have any utility in a country with no roads.

Daniel Drezner - China probably won't collapse. It's only his opinion, and he admits politics wonks should never make predictions about economics. Also, it's unsettling that this is still a topic for debate.

Reformed Borker (Bork Bork Bork!) - shorts shouldn't overstay their welcome. The interesting bit to me is the last sentence, where he says he thinks the coal and steel shorts are about to get burned.

Mining.com - China's foreign mining misadventures. I guess you shouldn't expect your position's out to be a buyout by the Chinese, since they're eventually going to realize how bad they suck at buyouts and stop.

The SMA(200) is also here at around $18.50. So I guess this is the entirety of the move for the next little while, and it'll probably find some reason to back off. After all, a 10% win in one week isn't something you'd expect from a shitty base metals miner.

After all, Lassonde isn't an idiot, is he? If he was an idiot he'd be poor and someone else would be rich.

“I spent 40 years in the gold market. That’s all I’ve done with my life,” Pierre Lassonde told the assembled audience at Grant’s Fall Investment Conference. “I think I know a thing or two about gold.” Our host Jim Grant introduced him as one of the few moneymakers in the gold sector.Lassonde is a co-founder of Franco-Nevada Mining, and he sits on the board of New Gold (NGD.)

Much of what he had to say was what you’d expect a gold bull to say. But there were a few things that I thought were particularly interesting and perhaps things you haven’t considered.For example, analyst forecasts on gold have been wrong for years. And they’ve been wrong always in the same direction — too low!On that score, Lassonde shared the chart below. The way to read this chart is to start on the far left. That first line, the lowest line, is a plot of the 2007 forecasts. You can see analysts projected a gold price of less than $600 an ounce by 2012. The next line up, which begins in 2008, is a plot of the 2008 predictions. Same thing. You can see the predicted gold price was under $800 an ounce. In each set of predictions, analysts not only forecast gold prices too low, but they forecast gold prices to decline a few years out.And so on through the years. The top line plots the forecasts made today in 2012. What’s most interesting about this is the steep dive the price of gold takes after 2013. Basically, the market consensus is that gold prices are going to fall beginning in 2014.So if the consensus is wrong — as it consistently has been — then you stand to make a lot of money taking the opposite view.A consensus like this is more important than you might think. All these same analysts derive the valuations on the gold stocks they cover by referencing some “price deck” (as they say in the trade).The market often takes its cues from these analysts. Hence, those big moves up and down on a day some analyst upgrades or downgrades a stock. So if the analysts are using gold prices that are too low to value gold stocks, then the market values of those gold stocks will prove way too low.Another nugget from Lassonde came on the heels of a prior speaker’s comment — it was Bruce Kovner of Caxton, one of the best hedge fund managers around — that the gold price could tank if the Fed backed off its QE stimulus plans. Lassonde cut right to heart of why this was so much weak beer.“What I find interesting in coming to the U.S. is the views of gold are very U.S.-centric,” Lassonde said. “I spend three months per year in Europe. I’ve lived in Canada and tour the world on a regular basis. I want to give you a more worldly view of the gold market.”What he gave us was a pretty imposing fact: China and India account for 47% of the demand for gold. The rest of the world, excluding the U.S. and Middle East, account for 41% of the demand for gold. This is in sharp contrast to the state of affairs that existed as recently as 2002, when the U.S. and Middle East represented 25% of demand. China and India then made up only 23% of demand.So the great bulk of new gold buying is coming out of the two Asian giants. That puts Kovner’s remark in the shade. As Lassonde said, “Don’t think that the fiscal and economic policies of the U.S. will have everything to do with the gold market. China and India will have a heck of a lot more to do with what happens in the gold market than Washington.”Another great chart from Lassonde shows how the world’s central banks are now buyers, instead of sellers, of gold. Take a look:Just think: In 2006, central banks sold 600 tonnes of gold. In 2011, they bought 400 tonnes of gold. This is a big change.I think these are some compelling points in favor of gold. If you are bullish on gold, then you might think, naturally, that you ought to buy gold stocks. So what about gold stocks?“If you’ve been in gold equities the last seven or eight years, you’ve probably not had a great ride,” Lassonde said. “You’ve either marked time or lost money altogether. You would’ve made more money buying the gold ETF [exchange-traded fund, like GLD].”Why have gold stocks proven such a lousy place to put money? There are lots of reasons, most having to do with the deteriorating economics of mining the stuff.New finds are proving increasingly elusive. New gold mines are smaller and have lower grades — meaning you have to chew through more rock to produce a given ounce of gold. New mines are more expensive to mine and take longer to bring into production.In essence, gold assets are of lower quality — and getting lower. The technology hasn’t changed much in 30 years. Nothing like what has happened to oil and gas has happened in the gold sector. Lastly, governments are more rapacious, taking more in taxes.All of these things translate into less economic assets and poor stockholder returns. I don’t think this is widely appreciated by those who speculate in gold stocks. You’re really better off just buying the metal. At least that’s been the way it has been for the last seven years or so.Having said that, I know you may well enjoy speculating on gold stocks for a big return with full knowledge of the risks involved. And not every deposit is an economic disaster area. Lassonde himself has made a lot of money investing in gold stocks. Just know that the odds are stacked against you even as the price of gold moves higher.How much higher? It’s anybody’s guess. Lassonde guesses gold will hit $13,000 an ounce over the 10 years before the party ends. There is a lot of space between today’s $1,700 an ounce price and Lassonde’s guess.Let’s hope Lassonde is wrong if only because a world where gold is $13,000 an ounce is apt to be unpleasant in many other respects. But better own some of the shiny metal just in case.

Having completed my 2012 Capital "Gains" (or so the Germans would have us believe) forms, I see my biggest 2 wins last year were NCU and BCM. Really could did no wrong with either, made >$10K on each and could have easily broke $20-$30K each if I hadn't sold as they went up.

So I ran back to those two this morning.

BCM's still where it was, but look at NCU which I bought at $2.83 or something:

I guess an operating IOCG mine close to production in the poorest county of a state represented by Harry Reid doesn't suck anymore? Like, there's a reason to own it all of a sudden? Which there wasn't just four frickin' days ago?

The problem with having a refreshing full night's sleep is that my brain becomes an uncontrollable jukebox. Other people have voices in their heads; I have the Kinks' "Stop Your Sobbing" right now, because the intro riff matches up with something I was humming a few minutes ago that I've already forgotten.

Still better than today's broadcast radio though.

The title above, also, is a reference to a Legion of Green Men song. Can't sing along to it though cos it's complex instrumental trance - whoops, but now I'm humming the main synth line from about 3 minutes in.

Anyway, here's the US Dollar rolling over, hopefully, maybe, perhaps, we can only hope:

And here's an owl jpg, only because I've not had any good reason to use it and it's not applicable here but it's still here on my hard drive at work and it's very funny:

Ritholtz - why is consumer discretionary hitting new highs? He looks under the hood to reinterpret what we already know. This time might actualy be different; health care might have a non-defensive reason for going up, for example. And utilities and stapes have high dividends and little volatility ex-disasters, so they're a better place to go for yield than bonds. Related to this,

New Deal Democrat - the oil choke collar loosens due to natural gas. A year ago people already thought shale gas was going to be transformative for the US economy. You should go back and look up who said that, and who disagreed; continue reading the former, and stop reading the latter. With big transformative plays like this you simply have to get them right or you're a clown.

WaPo Wonkblog - why Abenomics is so important. Like they say, it's a living experiment to determine if the Fourth Reich Eurozone are going about everything the wrong way. If Abenomics can turn out some good results before the German election in September, things might turn out differently for Europe... well, I can always hope, right?

FT - EM consumers kep consuming. Now do you think that the gold consumption of the EM middle-class goes up as it increases in population? Or down? Hm? Do you think the amount of gold consumption increases year over year, or decreases, as the EM middle class grows? Hm?

beyond brics - Indian real estate mired in corruption. Now imagine you live in this country: would you trust a bank to protect your savings, or would you buy shiny gold-coloured things instead? Lesson over.

Ritholtz - the new rotation - commodities into bonds? I think that'd be a good thing, getting the vacationers out of the metals. But this theory of Ritholtz's doesn't explain the record high shorts in silver. I assume you don't get out of a thing by shorting a thing.

der Spargel - Germany owes Greece 162 billion Euros in war reparations. No, this isn't a joke, it's real. The Greek government are being sissies for not wanting to bring this up, especially when it's already made it into the German media; I'm sure Tsipras will make it a part of his platform, though. Is now really not the right time to "pick a fight"? With the Germans, every time is the right time to "pick a fight".

Jim O'Neill - Abe and Kuroda, oh my! He seems to be nothing but bullish on Japan right now. That, to me, is fantastic for the world economy.

Mineweb - gold supply constraints hit India's south. A lot of gold smugglers are going to be expanding their business footprint soon, methinks. Interesting side fact: Kerala has only 3% of India's population but consumes 20% of their gold. So maybe it's not all about India; is it all really about Kerala?

Jojo liked it enough to use it in his most recent update, as far as I can remember. I think it looks pretty positive, myself. Though of course shorts can sometimes be right, when something really is about to go down - look at the recent Yen action for example. Or look at the above chart pre-2000; who knows if we're in another pre-2000 downward trend for the PMs?

Bull Market Thinking - an interview with Nolan Watson. I have no interest generally in Tekoa da Silva, but am happy to pass on links to interviews with Nolan Watson. Personally, I'd like to hear from him where he thinks his future competition is going to come from - streamers seem to have a very high moat to entry.

France is engulfed by a political, economic and moral paralysis. The president has record low popularity, unemployment is making new highs and the tax czar of a supposedly left wing government just quit after repeatedly lying about a pile of cash he had stashed in a Swiss bank account. From such a sorry state of affairs, you might think that things could only get only get better. Unfortunately, economic cycles do not work this way and it is my contention that France is about to enter what was known during the gold standard era as a “secondary depression.” The rigid design of the euro system means the whole eurozone is prone to the kind of brutal cyclical adjustments seen in that hard money era of the 19th and early 20th centuries. But having reached the logical limits of its decades long experiment in state-run welfare-capitalism France is far more exposed than even its struggling neighbors.

Q: What is your view on gold? A: That’s a complicated question. It has disappointed the public, because it is meant to be the ultimate safe haven. But when the euro was close to collapsing in the last year, actually gold went down, because if people needed to sell something, they could sell gold. Therefore they sold gold. So gold went down together with everything else. Gold was destroyed as a safe haven, proved to be unsafe. Because of the disappointment, most people are reducing their holdings of gold. But the central banks will continue to buy them, so I don’t expect gold to go down. If you have the prospect of a crisis, you will have occasional flurries or jumps. So gold is very volatile on a day-to-day basis, no trend on a longer-term basis.

Oh really?

I'm sure the ZeroHedgers are having a field day with this. I'm sure I'll sound like a ZeroHedger when I wade in. Basically, Soros is either lying, or he's too stupid to be the George Soros we all know and love.

Or, most likely, Joe Wiesenthal is a fucktard who is distorting what Soros has said - probably because he's being paid to publish stories to tank gold.

The "safe haven" value of gold is not to hedge your portfolio in case of a poor election result in Italy, or bond risk in the Mediterranean, or the implosion of a few stupid banks on some shitty island tax haven.

George knows this.

The "safe haven" value of gold is to hedge your survival in case the Kerensky government is overthrown by the Bolsheviks. Or in case Hitler passes laws making it illegal for your people to own property and currency controls to keep you from taking Reichsmarks out of Germany when you flee.

Gold's value as a "safe haven" is to hedge against catastrophic risk. It works because, even in an environment where all the rules of the market are thrown out (like Nazi confiscation of Jewish assets or Bolshevik confiscation of Russian assets), physical gold's value cannot drop to zero; but stocks, bonds, real estate, and even cash can all go to zero.

The problem Soros sees is that, in case of non-existential risks like the chickenshit happening in Europe over the past couple years, gold has proven itself to be positively correlated on the downside with other assets.

This is probably because, in today's market environment, every large participant is highly leveraged, so when crisis hits one asset all the others have to get sold down vigorously. So paper gold goes down strong when everything else goes down strong.

Or it might also be because gold is positively correlated on the upside with EM growth.

I think George isn't so stupid, by the way, that he would suggest that white people have anything to do with the demand for physical gold anymore. Especially since he was giving this interview to the South China Morning Post.

And I don't think he's so stupid to think that you can use paper gold to hedge against catastrophic risk. I doubt he uses paper gold as anything other than a speculative play. And I betcha he has a stash of physical gold in a vault in Singapore, another in Switzerland maybe, and most likely another stash in NYC.

Sunday, April 7, 2013

Like I was saying maybe last year, a lot of Euro commentary is bullshit. Two reasons:

1. A lot of Euro commentary has an underlying political/racist bias: it assumes that the swarthy brown Catholic periphery are lazy, socialist, thieving and generally economically inferior, and the Aryan core are better-working, more honest and ethically pure. As it turns out, Germans just have different kinds of corruption (e.g., tax evasion, politicians enslaved by big business, and arms dealing are a few defining aspects of German society) and economic inferiority (basically, the perverse enjoyment of economic misery).

then whenever you see any piece of news coming out of Europe, you can immediately consult the bond yields to see whether the news is yet more idiotic propagandistic blather, or whether instead it means something.

For example, despite the supposed lunatic in charge of France who's destroying their economy and quickly turning France into a peripheral state, the French 10Y yield right now is 1.75%. That's only 0.04% higher than the US.

If France really were fucked up, their yield would be closer to Italy and Spain.

Also, Italy is 4.35% and Spain is 4.75%; as long as both are below 5% you have no stress in Europe, and when their Bund spreads decrease it means Europe risk is lowering.

Bond spreads are determined by people who have a fucking clue and who have a lot of money to lose. They will tell you the truth even when the media lie.

* - the Bloomie app for Android also has a page for world bond yields that you can consult whenever you want on your smartphone, if you've come to join the rest of us in the 21st century.

Something neat that I've noticed before, but it's pretty blatant in my transactions for this year.

Say I buy Rio Alto in July. On my L2, supplied by the good folks at my bank-related discount brokerage, it shows over 4900 shares at $4.08. So I buy 4900.

The transaction details show that I actually bought 100 at $4.078 and 4800 at $4.08.

Two days later I sell for a profit. The L2 shows enough bid on the stock that I can just dump all with a limit of $4.30. So I do, but the transaction details show that I sold 100 at $4.302 and 4800 at $4.30.

PS Dave says that fractional-penny bid & ask only happens on the parallel exchanges (I guess Alpha and Chix and so on). Kaiser apparently says that all we stupid retail have access to is the main TSX L2 - or maybe it was someone else.

Now in the case of RIO, I was probably buying most shares from retail and selling most to retail - so it's a bad example for my rant here, but it's what's in front of me right now. But there are other stocks that I already know get walked up and down by bots - DPM is the most egregious example, but you see it with other relatively illiquid stocks too.

So I guess what happens is, like Kaiser's friend at PDAC said, is that some institution has a fractional-penny front-running buy on a parallel exchange, with other bids on the main L2. If the main L2 has its closest bid at $4.30, this dude puts a 100-lot bid in at $4.302, and then when that gets sold into it moves the rest of its bids on the main exchange down before the rest of your sell hits them.

Basically, I guess this is the way that the instos squeeze pennies out of retail.

This is information & power asymmetry in action. Retail in the aggregate will automatically lose money to the instos, because we have less information (an incomplete L2) and less power to direct orders (say, being able to specify TSX-only or all-or-nothing orders). When you have less information and less power, you automatically are at a greater disadvantage than normal.

The system is structured this way on purpose.

Of course we could fight this, say by checking our orders when we put them through and posting the results somewhere so that other retail automatically know what they're up against. Heck, in cases where the bots are doing something stupid, we can call all our friends over to join the trade and swamp the bots - I've had some stocks where I've had 100% trading success, and they're usually ones where I'm a large enough footprint in the market to swamp bot volume.

Or, of course, we could just say "fuck it" and trade based on the chart. After all, when DPM is being walked up and down by bots, aggravating every intraday move, this generates opportunity for retail by increasing the spread we can make on short-term trades: if DPM was puked down to $6.50 on low volume and is now >2SD down, you can put a limit buy in and the bots either have to stand in your way and gobble shares, or stand back and let you get a fill. Then when DPM goes back up, the bots push the price higher on low volume and you can put in a limit ask for the next retail who comes along and wants to buy more than the 300 shares the bots have on offer.

Really, it's probably a behavioural inferiority that allows bots to take money from retail. If us hayseeds bought counter-cyclically, only putting in limit orders and only buying on big down days with low volume, we'd end up making money off the bots. Or at least we'd force them to be more aggressive with buying than they want to be - especially now that there is so little participation left in the miners that no insto with any intelligence would want to participate in the miner market anymore, since their positions will quickly get too large for the kiddy pool they're playing in.

So in sum, yes I hate the instos and I'll always have a steeltoe snack ready for anyone I ever meet from a bank or investment house, but I do really think this kleptocratic information-asymmetric system still supplies liquidity and the hayseeds can still take advantage of it.

And as either Puplava or Kaiser says, the junior world is now to the point where all the retail participation has nearly left; the bots will have to move to some other, more fertile ground eventually.

I am totally in favour, btw, of the idea of adding a transaction fee for every single bid or ask placed; make it a full cent per lot and make it non-refundable, so that every time a chickenshit 1-lot order is placed, moved, or cancelled, the bot pays another penny. You can tell Kaiser's a philosophy grad cos he sees the "friction" analogy - if you add friction to a system, especially a feedback system like the stock market, you automatically reduce the amplitude of movement.

Some friction in the market would help.

But of course this will never happen because the market exists to make the bankers money. Not you.

Sure, in the case of the little explorecos (and a few of the producing miners even), maybe that means the bots leave the field entirely and you're left with chickenshit stocks with one bid at 25 cents and one ask at 80 cents. Well, every stock I've gotten involved in with a thin book has turned out to be a fucking disaster anyway (yes, even producers, with a certain partially-Argentinian-involved miner at the front of my mind at the moment); you should be avoiding the thin-book stocks altogether, so it seems.

Anyway, I have to get back to work, but that's just a small rambling pile of thoughts for you to either consider or not.

Basically, not being able to tell something's unfair is a defining characteristic of the stupid.